China woos African trade

For Chinese officials, this weekend's summit here of more than 40 African leaders is a chance to celebrate Beijing's booming economic ties with the continent.

For Western governments, though, the jamboree highlights a new and troubling source of friction with China: the Asian giant's readiness to bail out African regimes that the US and Europe are trying to pressure into improving their human rights and good governance records.

In its drive to feed the booming Chinese economy's voracious appetite for oil and other raw materials, the Chinese government has not always been choosy about the African friends it has made – such as pariah regimes in Sudan and Zimbabwe.

Its indiscriminate glad-handing, though, is frustrating recent Western efforts to use trade, aid, and investment to compel certain African regimes to clean up corruption and dubious ethics.

For their part, Chinese officials say that business is business, and that it is not their job to tell others how to run their countries.

"It is never our view that a country should interfere in another country's internal affairs," Deputy Foreign Minister Zhai Jun said last week. "We've never imposed on other countries our values ... and we do not accept other countries imposing their values on us either."

That principle has guided China's dealings with the world for 50 years, points out He Wenping, head of African studies at the Chinese Academy of Social Sciences. "It has played a very positive role in developing Chinese influence," she says. "Developing countries appreciate it very much. It won't change in the near future."

China's business with Africa is exploding; trade has increased tenfold over the past decade to nearly $40 billion a year, making Beijing the continent's third largest trading partner, just behind the US and France. Chinese investment now tops $6.4 billion, largely in oil installations but also in prestige projects such as railroads in Angola and Nigeria, sports stadiums in Mali and the Central African Republic, and Africa's largest dam in Ethiopia, according to Deputy Trade Minister Wei Jianguo. China's president, prime minister and foreign minister have all visited the continent this year.

Alongside Chinese rhetoric about cooperation among developing countries sits the Asian giant's insatiable need for oil and raw materials. Angola and Sudan are China's biggest African trading partners, selling Beijing 25 percent of its oil imports. Within five years, officials here say, that share will rise to 33 percent.

Beijing secured its position in Angola with a $2 billion loan. That windfall came just in time for Angola, which is ranked 151 out of 158 nations in Transparency International's 2005 corruption ratings. Thanks to Chinese generosity, Angola managed to avoid submitting to good governance conditions that the International Monetary Fund was attaching to its financial assistance.

China's investments in Sudan's oil industry, and its payments for Sudanese oil, have also emboldened Khartoum to rebuff United Nations efforts to send an international force to Darfur, where some 200,000 people have been killed since 2003.

"Khartoum can tell the rest of the world" where to go, complains Peter Takirambudde, head of the Africa division of Human Rights Watch. "They've got the cash. China gets a nice deal and in return it undertakes to see no evil and speak no evil about human rights. That's the most dangerous trend."

Beijing insists that it has used its influence with the Khartoum government to try to convince the authorities to accept a UN force. "We are using our own channels to try to bring the parties to a more sensible position" Mr. Zhai told reporters.

Chinese analysts also say that as latecomers to international investment, Chinese state-owned and private firms have been forced to explore markets that Western firms have not already snapped up, sometimes for political reasons.

International aid donors, though, worry that China's scruple-free approach undermines their efforts to improve African governance. World Bank President Paul Wolfowitz complained last week that Chinese lenders "do not respect" a set of internationally agreed principles to ensure that loans to African countries fund projects that meet high social and environmental standards, and hoped that Beijing would not follow past Western practices of propping up corrupt African dictators.

Africans themselves are beginning to complain – especially businessmen and trade unionists in countries such as South Africa, where cheap Chinese imports are undercutting local manufactured goods and threatening local firms. In Zambia, anger over poor conditions at a Chinese-owned copper mine – where a Chinese security guard shot three workers in July – colored last month's presidential election campaign.

That incident should serve as "an early warning bell for the Chinese government and companies," says Dr. He. "These economic frictions can become a political issue."

One problem, says Wang Hongyi, an analyst with the China Institute of International Studies – a think tank linked to the foreign ministry – is that "even at home it is hard to supervise private companies." Another is that Chinese companies unaccustomed to strong trade unions or environmental laws at home find them difficult to deal with abroad.

Chinese firms, however, "are judged by the same standards as other international companies that operate in Africa," says Chris Alden, an expert in African politics at the London School of Economics.

In the long term, he predicts, Chinese investors – both state and private – "will conform to the same positions as other international players because governance issues will be as much a problem for them as they are for other multinationals.

"As China becomes a card-carrying member of the group of leading states, it will move away from its policy of not attaching conditions" to its loans and investment, Dr. Alden suggests. And with Beijing's activities in Africa under increasing international scrutiny, it will be obliged to "untangle and normalize relations" as it settles down to deal with classic donor problems such as debt management and trade disputes.

As it does so, says Mr. Takirambudde, "China will have to develop relations with Africans at large, not just with the top dogs.

"In the short term they can disregard" the behavior of their African partners, he adds. "But in the long term that is not sustainable. Eventually they will be forced to take account of these issues."